Tag Archives: ecological services

We can all use some positive news these days, especially on the environmental front in which science is considered evil, denial is an alternative fact and the EPA is now what I’m calling the Environmental Destruction Agency. And while I don’t want to gloss over the issues – there isn’t enough paint in the world to do that – I offer here The Distillery, a weekly (or thereabouts) selection of posts to help offset the PTSD of our current nightmare.

The posts I pick will be “real” in the sense that they aren’t pie-in-the-sky wishful thinking, as fun as those can be, but are evidence of EcoOptimism.

For the new year, let’s celebrate some renewal – in the form of reforestation. You probably knew that trees are one of the best methods of reducing carbon dioxide in the atmosphere. (Other than not putting it there in the first place.) Though it’s not all good news, here are some posts illustrating just how effective they can be.

I tend to write a lot about messaging and sound bites [here and here, for two], sometimes with the simple sounding proposal that the environmental movement needs better and catchier phrases. (For instance, something less dull and abstract than “the environmental movement.”) So a sentence in a current post in one of my most favorite and least catchily-named blogs, The Center for the Advancement of the Steady State Economy, caught my eye: “Laissez-faire takes on a new meaning — it is the ecosystem, not the economy that must be “left alone” to manage itself and evolve by its own rules.”

What a neat twist on the religious-like belief in conventional laissez-faire, the doctrine that the so-called free market, if “left alone” – which is a near literal translation of the term — will provide the best outcomes.

A reasonable response to that orthodoxy is: the best outcomes for whom? Herman Daly, the renowned economist and author of that post, similarly turns the laissez-faire idea on its head by suggesting that it’s the environment, not the market, which should be left alone.

A closer translation of laissez-faire is “let do.” And that interpretation, I think, is even more suitable as an approach to the environment because, from our human point of view, it is what the environment does that is critical to our existence. Interfering in the environment’s ability, honed over millennia, to do things like purify water and air, and maintain the exquisitely balanced temperature of the troposphere, is in the interest of neither us humans nor that free market that supposedly makes our lives better.

So how can we co-opt the phrase or come up with our own (preferably in the authoritative tones of a foreign language)? Any of you French-speakers out there have suggestions? At the risk of trivializing another powerful slogan, and since I’m bound by my fluency only in English, my dangerously off-the-cuff first thought is “let my environment do.”

OK, I withdraw that suggestion. Contain your sighs of relief. But I stand by the idea, or rather Herman Daly’s idea.

I thought – or hoped — Paul Krugman’s recent New York Times op-ed, “Cheating Our Children,” was going to be about an important issue involving our individual and societal responsibilities to our descendants. It was – just not the one I anticipated from the headline.

Perhaps I was practicing wishful thinking, but when I read “Yes, we are cheating our children, but the deficit has nothing to do with it,” I assumed he was going to talk about the fact that the decisions we make today are determining the environment (and hence the future) for upcoming generations, and that those generations have absolutely no voice in those decisions.

The points he makes deal with important, fundamental issues of what kind of future we lay the groundwork for. But he’s writing specifically about financial futures, not about what I consider the even larger ethical question, the answer to which will define our children’s lives in ways beyond just economic bottom lines.

I thought he was going to build upon one of the essences, one of the foundations, of the American Revolution. (No, not the misapplied right to bear arms.) I’m referring to a concept sometimes called remote tyranny. Back then it was about a distant government that was ruling the colonies, taxing them and making laws without allowing representation. (Yep, the origin of the real Tea Party.)

Thomas Jefferson wrote of the remote tyranny of the British and later wrote of intergenerational responsibilities: “the earth belongs to the living……..no man may by natural right oblige the land he owns or occupies to debts greater than those that may be paid during his own lifetime. If he could, then the world would belong to the dead, and not to the living”

In more recent years the concept has been adapted to a different type of distant rule without representation: intergenerational remote tyranny. (The term appears to have been coined by William McDonough, co-author of the seminal ecodesign book Cradle to Cradle.) The potential – some say the probability – exists that a generation or two or three from now, “we” will be faced with a dramatically different world, one with flooded cities, harsher weather, scarce water and fossil fuels, resulting in massive relocations and food shortages, among other possibilities. I put “we” in quotes because it is humanity, but not exactly us since many of us will not be around, and that is the intergenerational aspect.

I once asked a new client, whose home I was renovating, about her degree of interest in incorporating environmental criteria in the design. She replied jokingly “well, we don’t have kids, so we don’t really care.” It was, though, an astute comment on our inherent selfishness, combined with the fact that humans are not wired to think about abstract futures. We respond to imminent tangible dangers, like fire or attack, but we’re not as good at dealing with more distant scenarios, particularly when we haven’t experienced them before or when the timeframe is longer.

Krugman’s column was dealing with the impacts of financial debt, questioning the relative importance of imposing a financial burden on our children versus the effects of disinvesting in programs that will benefit them. There is a direct parallel in the form of environmental debt. When we use up a resource, it means it will not be available for later generations. That, too, imposes a cost. The cost will vary depending on the resource. Some will be replaceable by other resources, meaning only that the cost will rise. Others, such as water, may not be replaceable at all, thus causing a wholly different kind of burden.

A financial analogy is useful. We can think of the planet’s stock of resources as bank accounts. There are accounts for each resource: potable water, oil, oxygen, topsoil, rare earth minerals, and so on. Left to themselves, the planet’s ecosystems keep these supplies in balance: purifying water, creating oil from decaying carbon, cycling oxygen and carbon dioxide, absorbing and reflecting critical amounts of solar radiation, etc. It’s an incredible system.

The problems come in when we exceed the regenerative capabilities of these systems, when we draw down these resources faster than the ecosystems can replenish them. It’s the same as withdrawing from a bank account faster than you make deposits. You can do it for a while because the account had a starting balance, but eventually you run out. In the case of fossil fuels, the earth has been slowly depositing into that account for millennia and created a huge stock. But then we started extracting and burning those fuels at a rate far, far faster than the earth’s ability to replenish them, leading us to “peak oil” and, eventually, a point where we’ve used up all that is available.

The rate at which individual resource stocks are being used up varies with the “opening balance” in the account, the speed of replenishment and the amount of withdrawals. Some resources can be thought of as having huge trust funds that are resupplied by high interest investments, and those are not likely to be a problem. Others, though, have less positive financial projections: their funds may run out in a matter of a few generations (or less). But our “nature” hinders our ability to plan for these possibilities.

Source: http://www.bbc.co.uk/bbc.com/future/img/BBC-stockcheck-02.jpg

Another part of this issue is that we tend to not think about, or include in our economics, the “free” things we get from nature. In environmental economics, these are referred to as ecological services. What is the dollar value of nature’s purification of water or of a forest’s ability to absorb carbon from the air and release oxygen? Where do these appear in corporate bottom lines or in GDP? They don’t, of course. And that’s part of the rationale behind a carbon tax – it’s needed in order to correct for this omission and to make the market work more accurately.

In terms of our topic here, Cheating Our Children, this glaring omission in our economic accounting serves to further worsen the degree of debt we are passing down. It’s the equivalent of double bookkeeping: one set that looks (relatively) rosy for us and another for our children.

Krugman’s column ends with “[O]ur sin involves investing too little, not borrowing too much — and the deficit scolds, for all their claims to have our children’s interests at heart, are actually the bad guys in this story.” In our ecological version, we ARE borrowing too much, as well as investing too little. And the bad guys? Well, to a degree it’s all of us in the consumer world, but in the analogy to the supposed debt crisis, it would particularly be the parties who profit from the double bookkeeping and the climate change deniers, many of whom have direct ties to the former.

The combination of double bookkeeping and short-term thinking are the real cheats. Krugman is right in asking why we are “shortchanging the future so dramatically and inexcusably.” His economic answers, though, only address our children’s finances without assuring there will be a livable world to spend it in. EcoOptimism says we can – and have to – do both.

I go on at times about the significance of the precautionary principle, the idea that “if an action or policy has a suspected risk of causing harm to the public or to the environment, in the absence of scientific consensus that the action or policy is harmful, the burden of proof that it is not harmful falls on those taking an act.”

Here in the U.S., regulations tend to work strongly in the opposite direction in a sort of innocent-until-proven-guilty approach to things like synthetic chemicals. This means we can be subjected to substances that are suspected of being dangerous to our health or to the environment up until the point (and perhaps after) they are proved dangerous.

Europe, on the other hand, has adopted the precautionary principle as policy: “the precautionary principle may be invoked when a phenomenon, product or process may have a dangerous effect, identified by a scientific and objective evaluation, if this evaluation does not allow the risk to be determined with sufficient certainty.”

Bees have a crucial role, far beyond their occasional annoying habit of stinging us when provoked. They are the great pollinators, without which many types of agriculture would be close to impossible. A true die-off of pollinating bees could trigger a food disaster. (This is just one example of the free services provided to us by nature; services that we tend to destroy without understanding the costs or ramifications.)

This ties together two fundamental concepts of environmentalism: the precautionary principle and the valuation of nature’s services. Neither one receives nearly the amount of attention deserved. Ignorance of either one of these, let alone both, paves the way for catastrophically bad decisions.

If you’re into economics (and, after all, who isn’t?), you probably see economic theory as divided into two camps, supply-side and Keynesian, that roughly coincide with Conservatives/Republicans and Democrats. Supply-side economics became better known as trickle-down economics while Keynesian economics is grouped with neoclassical economics.

But never mind all that. If you were reading closely (and not already bored by this slew of terminology), you may have noticed that Liberals or Progressives were not represented above. That’s because, in the eyes of many lefties, neither of those economic camps has it right. In short, both schools ignore nature and therefore are fundamentally wrong about how the world – and the economy that is a subset of it – works. They deal instead in an artificial idea of economics in which humanity essentially lives in a vacuum.

No, that’s not quite right either. If we somehow actually did live in a vacuum, we’d have to provide everything on our own. There’d be no oxygen or water or coal or, well, anything. But we don’t and can’t exist in a vacuum. Instead, we draw upon nature for everything we make or consume.

What if bees charged for pollinating?

The problem is that conventional economics pretty much ignores that fact. It regards nature as free. We can take anything we want from it and we can dump anything left over into it. It’s the ultimate free lunch. And as fans of Robert Heinlein, Barry Commoner or Milton Friedman know, There Ain’t No Such Thing As A Free Lunch.

Conventional economics also regards nature as unlimited, at least in a theoretical sort of way. The thinking is that we’ll never run out of something because its price will increase as its availability diminishes and, as that price goes up, we’ll either use less or switch to alternatives.

But there are a lot of problems with this approach. An obvious one is that some things in nature, like oxygen or water, are irreplaceable. If we run out of those, or if they become exorbitantly expensive, it’s game over.

Yet we don’t really put prices on those things either. They’re “free as air.” Which means we don’t know the true cost of things. (Riffing on Oscar Wilde, the authors of Natural Capitalism wrote “People now know the price of everything but the true cost of nothing.”)

We do put prices on everything we do. (Well, more or less. A lot of the most important things we do, like raising children or taking care of elderly parents, are considered to be outside the economy.) When nature does it though – when nature, for instance, grows a tree or makes oil – that doesn’t appear anywhere in our ledgers. Yet the benefits are ours for the taking.

The alternative goes by a few names. Perhaps the most widely used is ecological economics. I alluded to it in my facetiously titled post Planets Are People My Friends. The acknowledgement that conventional economics has this fundamental flaw goes back quite some time, but has only started to gain wider recognition more recently. Sometimes on the fringes: the True Cost Economics Manifesto, with strident, almost revolutionary language, seems to have appeared around 2005. (The original website is gone, but the manifesto is reposted at Adbusters, among other places.)

But more recently, perhaps as some of the signers of that manifesto graduated into the “real” world, the fringe has moved inward, with a widespread understanding that the Earth’s “commons” (its air and water and other resources) are not a fee-free dumping ground.

Korten writes: “With proper care and respect, Earth can provide a high quality of life for all people in perpetuity. Yet we devastate productive lands and waters for a quick profit, a few temporary jobs, or a one-time resource fix.”

At Fantasy Camp, the counselors educate campers to believe that humanity can circumvent natural limits. Campers are taught that our unstoppable ingenuity can overcome any resource shortages or manage any amount of waste generation. There’s a strong undercurrent of consumption — a desire to accumulate ever more power and stuff in an attempt to gain complete control over life (and even death).

(My take on this was probably decided many years ago when my parents sent me to – literally – a science camp. Unfortunately, it was long before geeks were cool. But I digress.)

In EcoOptimism parlance, Wall Street’s economy is based on “win” only and the hell with everything else, while Nature’s is win-win-win. In other words, the one per cent vs 100%.

Focusing on the optimism aspect of our blog here, my usual late night tour of the interwebs caught a slew of headlines that left me in a better mood than I started – indications that the business as usual status quo is being questioned, sometimes in high places, and principles of EcoOptimism are getting more attention. Here, for your end of the week boost, are a few of them.

From The Economist, a realization that growth unfettered is not necessarily good:

In America the share of national income going to the top 0.01% (some 16,000 families) has risen from just over 1% in 1980 to almost 5% now—an even bigger slice than the top 0.01% got in the Gilded Age.

[I]nequality has reached a stage where it can be inefficient and bad for growth.

Even the sort of inequality produced by meritocracy can hurt growth. If income gaps get wide enough, they can lead to less equality of opportunity, especially in education.

Here’s the positive take-away:

The priority should be a Rooseveltian attack on monopolies and vested interests, be they state-owned enterprises in China or big banks on Wall Street.

According to a new study from the Economic Policy Institute, “Industries that support a higher number of “green” workers who are making goods and services more environmentally friendly have experienced a higher rate of growth over the last decade than industries with fewer green jobs.”

The 2010 result: “3.1 million green jobs nationwide in renewable energy, water management, recycling, and various positions that help improve the efficiency and environmental footprint of a company or institution.”

One of the positive outcomes achieved on the sidelines of the Rio+20 conference, as highlighted by Jo Mackness at GreenBiz on June 26, was progress made on natural capital accounting. Fifty-seven countries and 86 companies, for instance, signed a World Bank-organized communiqué committing signatories to account for the value of clean air, clean water and forests in their decision-making.

[Federal Reserve Board Governor Daniel ]Tarullo said that, in order to keep big banks from growing so large that they threaten the entire financial system, they should be limited in size to a certain percentage of the overall economy.

In a prerecorded talk for a conference this past summer, Bernanke said, ”…we should seek better and more-direct measurements of economic well-being, the ultimate objective of our policy decisions.”

Rather, Bernanke suggests that survey measures of happiness and life satisfaction should take their place alongside GDP as measures of how a nation is doing. In doing so, he joined current British Prime Minister David Cameron, who said ”it’s time we focused not just on GDP but on GWB—general wellbeing” and former French Prime Minister Nicolas Sarkozy, who said he would ”fight to make all international organisations change their statistical systems by following the recommendations” of the Stiglitz report. He refers to Nobel Prize winning economist Joseph Stiglitz’s committee’s work proclaiming “the time is ripe for our measurement system to shift emphasis from measuring economic production to measuring people’s well-being.”The emphasis is in the original.

It’s good to end the week on an up note. Would be great if I could make a habit of this….